Recent Updates
The 2024 annual general meeting (AGM) of VNM was held on April 25, 2024, in a virtual format. Photo courtesy of the meeting.
 The 2024 annual general meeting (AGM) of VNM was held on April 25, 2024, in a virtual format. Photo courtesy of the meeting.
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Prioritizing sustainable recovery of market share and sales
Based on the actual business situation in 2023, the Board of Directors of Vietnam Dairy Products JSC (Vinamilk, HOSE: VNM) submitted to the general meeting for approval a final dividend payment for 2023 at a rate of 9.5%, equivalent to VND 950 per share. Accordingly, the total dividend for the 2023 financial year is 39.5%, equivalent to VND 8,046 billion, and the dividend payout ratio is 91% of the consolidated profit after tax allocated to the company’s owners.
The plan for 2024 is for revenue of VND 63,163 billion, an increase of 4.4% compared to the actual results in 2023; profit after tax is VND 9,376 billion, an increase of 4%. The dividend rate for 2024 will also be 38.5%.
In addition, the Company plans to pay remuneration and benefits to the Board of Directors in 2024 of VND 25 billion with a structure of 11 members.
In his message to shareholders at the 2023 AGM, Chairman of the Board of Directors of Vinamilk Nguyen Hanh Phuc expressed optimism about the future: “Despite the macroeconomic challenges of the past year, we have demonstrated resilience and adaptability, and we are confident that these qualities will continue to drive success going forward. Our approach remains consistent with a focus on sustainable growth, innovation, and value creation for our stakeholders through appropriate investments in people, technology, and infrastructure. We are committed to leveraging our competitive advantages to achieve these objectives“.
CEO Mai Kieu Lien commented: “Moving into 2024, with expectations of improved macroeconomic conditions, we anticipate continued growth in revenue and profitability. The priority is to continue to recover market share and sales in a sustainable and profitable manner“.
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Business results of VNM for the period 2019-2020
Source: VNM
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Discussion:
When will the restructuring be completed?
We are focusing on digital transformation in all areas, including production, animal husbandry, supply, sales, marketing, human resources, etc. What can be done will be implemented in the first two years (of the 2022-2026 period), and we are trying to complete the rebranding by 2024. Currently, we are working on two areas in parallel, from supply to digital transformation. Although the Vietnamese dairy market is growing negatively, Vinamilk is still trying to maintain profit growth.
What are the company’s plans for the Dielac factory that is being cleared in Dong Nai?
We are working with the province on the relocation plan. Vinamilk currently has a milk powder factory with a capacity three times that of the Dielac factory, so the relocation will not affect us.
The beef segment is expected to generate revenue of VND 3,000 billion per year
What are the revenue and profit expectations for the beef segment over the next three years?
If production is stable, we will achieve revenue of VND 3,000 billion per year.
The planned profit after tax for 2024 is only 4% higher, while revenue is projected to grow at a higher rate?
Profit before tax will increase by 5%, while profit after tax will depend on tax incentives in each region, so the growth rate will be lower. The management team has discussed the plan in detail, and if we perform well, I believe the Company will exceed the plan.
Currently, which region has better sales, rural or urban, and why?
Vinamilk has 240,000 retail points of sale nationwide, offering products ranging from mass-market to premium, both in urban and rural areas.
What percentage of Vinamilk‘s revenue comes from advertising expenses?
We include these expenses together with sales and marketing expenses, which generally account for 20-21% of revenue. We manage this expense very tightly.
In the next five years, we will focus on digital transformation, so if there is an increase, it will be an increase in digital transformation expenses.
What impact does the new packaging have on sustainable development?
We are working with our suppliers to minimize the amount of recyclable packaging that ends up in the environment. The packaging of liquid milk in multinational corporations today is moving towards eliminating the plastic liner inside to reduce waste.
Has the export to the Middle East been affected by geopolitical fluctuations?
Shipping costs may be slightly higher, but they do not significantly impact export profitability.
Why are only certain products sold online?
We sell a limited number of items on e-commerce platforms, not all of them.
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In the first four months of the year, Vinamilk‘s exports grew by 14%
Will the company continue to operate the factory in the Philippines? How does the management team view the Philippine market?
The joint venture started in 2019, and then we faced the COVID-19 pandemic. I think these were inevitable challenges when entering a new market with a new product, but with the efforts of both parties, I expect the results over the next 2-3 years to be more positive.
Are the prices of organic products currently high for consumers?
Organic products are premium products that meet global standards from the farming stage to the final product, so the cost is high. A segment of the Vietnamese population is now willing to pay for these products, and I expect purchasing power to increase in the future.
The Hung Yen factory is currently being leveled; the province has granted a permit for 25 years, but we subsequently applied for a 50-year permit, which has recently been approved.
What is the company’s strategy for developing the Chinese and Middle Eastern markets?
These two markets have been part of Vinamilk‘s strategy for many years. Although we are new to China, we expect to grow there with our relatively unique products.
The Middle Eastern market has developed a wide range of milk powder products.
We are pursuing both exports and domestic sales in parallel. As of the end of April 2024, Vinamilk‘s exports have grown by 14% year-over-year.
What is the status of exports to China?
Since the market only opened at the end of 2023, we will provide an update on the figures in 2024.
Vinamilk does not
